A think-tank is calling on the Government to provide UK citizens with high-street vouchers.
“Cash transfers risk simply being saved by higher income households, who are already boosting their balance sheets through ’enforced savings’. A VAT cut meanwhile would do less for lower income households, whose finances are most likely to constrain their consumption, because they tend to spend more of their income on VAT exempt, reduced, or zero-rated goods.”
The proposal, which forms part of wider fiscal stimulus package put forward by the Foundation, would involve the delivery of up to £30 billion worth of consumption vouchers.
James Smith, Research Director at the Resolution Foundation, said:
“While every part of the economy has been affected by the current crisis, the stand out feature of this recession is that some areas are far more affected than others.
“Social distancing has huge implications for firms in sectors like retail, hospitality, tourism and leisure that will last into the forthcoming reopening phase. That is why the jobs of so many workers in these sectors are in the firing line. The Chancellor’s recovery package on Wednesday should reflect this unique economic challenge.
“As well as setting out the biggest ever peacetime job support programme, the Chancellor should get Britain spending in places where it’s needed most. A universal ‘High Street Voucher’ scheme – worth £500 per adult and £250 per child – to be spent only in these sectors would kickstart demand in the right parts of our economy, boost living standards and deliver targeted support to the businesses that need help the most.
“The Chancellor has already shown that big, bold measures like the Job Retention Scheme are welcome and necessary in the current economic climate. He should take this same approach as we enter the crucial recovery phase of the crisis.”
Photo by Arturo Rey on Unsplash
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